TECD Dividend Type Payments

TECH DATA dividend

Although TECD has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on TECH DATA to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 4:16 PM ET):

TECH DATA (TECD)
Bid Ask Last Change Volume P/E Market Cap
85.30 87.93 85.30 +1.49 106K 27 3.2B

TECD Dividend-Like Income Using Covered Calls

With TECD at 85.30, here's a table showing how big the annual "dividend" (ie. total annual call premium received) would need to be to attain 3%, 5%, and 10% annual yields. Also shown is the equivalent number of cents/day necessary to achieve each yield:

Annual Yield Annual Premium Cents/Day
3% 2.56 0.7
5% 4.27 1.2
10% 8.53 2.3

So now we need to find out of the money covered calls that pay at least the prescribed cents/day amount of time premium. That will generate income and, because they are out of the money, leave room for some upside potential on the stock. Here are some examples:

3% Yield On TECD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 95.00 0.80 39 2.1 7.07 (8.3%)
Dec 21 105.00 1.15 130 0.9 17.07 (20.0%)
5% Yield On TECD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 95.00 0.80 39 2.1 7.07 (8.3%)
Dec 21 100.00 1.85 130 1.4 12.07 (14.2%)
10% Yield On TECD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 90.00 2.00 39 5.1 2.07 (2.4%)
Dec 21 90.00 4.60 130 3.5 2.07 (2.4%)

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